Characteristics

Personal Wealth

"Do not risk our basic standard of living"

 

 

Preserve lifestyle, capital & cash flow

 

Value safety and reduced risk

 

Willing to accept below market returns to reduce risk

 

Includes ‘passion investments’ (antiques, collectibles etc)

 

Retain assets to be comfortable

Understand the opportunity cost

Market Wealth

"Continue Lifestyle"

 

 

Market level performance from a broadly diversified portfolio

 

Allocations provide adjusted market returns

 

Exposure to investments on an ungeared basis

 

Collectible investments that will be traded.

 

The mix of liquidity will be from within a week to six months over the spread of investments

Aspirational Wealth

"Enhance Lifestyle"

 

 

Take measured, but significant risk potentially enhance returns

 

Poor liquidity and complexity in investment structures

 

Often includes a combination of either concentration and/or geared investment

 

The risk should be non-recourse (ie not flow into other buckets)

 

The aim is to aspire (reach a new level of wealth) or accept loss of outlay 

Assets

  • Home & Mortgage

  • Holiday house (not rented)

  • Cash

  • Lifestyle (passion) assets

  • Traditional Annuities

  • Insurance

  • Human Capital

  • Equities

  • Listed property

  • Property investments (ungeared)

  • Fixed Income

  • Strategic Investments

  • Fund of Funds

  • Liquid “non-traditional” investments eg Commodities

  • Cash for opportunistic benefit

  • Alternative Investments

  • Private Equity/ Hedge Funds

  • Geared Equities/ Property investments

  • Small Business holdings

  • Concentrated stock and stock option positions

  • Employee Share Options

  • Speculative Share Holdings

     

Low Risk / Low Return

RISK/RETURN SPECTRUM

High Risk / High Return

Stress Testing Analysis

 

When we construct our advice we consider a number of stress points to identify areas that could result in the strategy being unwound due to a change in the circumstances. The points below are some of the considerations we make in the selection of your strategy and suitable investments. Depending on your circumstance and the changes in the environment these situations alter our advice to you:  
 

  • Loss of employment

 

  • Sustainability test
     

  • Debt to asset link

 

  

 

  • Aspirational goal test 

 

  • Sources of return test
     

  • Income vs Capital

 

 

  • Maintaining discipline 

 

  • Product selection  

 

  • Cost

 

 

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